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YouTube Won't Sell For Less Than $1.5 Billion
Joel from Sydney writes "According to a report in the New York Post, YouTube has informed potential buyers it won't be sold for anything less than $1.5 billion. The report lists Viacom, Disney, AOL, eBay and News Corp as potential buyers. Given that News Corp purchased MySpace last year for $580 million, is this a realistic figure?" From the article: "YouTube's stated business model is to 'pursue advertising,' but potential advertisers might be skittish considering industry estimates that roughly 90 percent of the content viewed on its site violates copyright laws. And at least one giant, Universal Music, is threatening to sue the company if its artists' songs keep appearing there. As it tries to focus on videos that don't use content owned by media companies, it yesterday launched the YouTube Underground, a contest to 'discover the most talented unsigned bands and musicians on YouTube,' backed by Cingular Wireless, Gibson Guitar and ABC's 'Good Morning America.'"
It won't sell for under 1.5b. It won't sell at all. Welcome dot-com bust 2 point oh.
The masses are the crack whores of religion.
When you've gotten so big that people are afraid you're controlling free speech and the press, then I don't think $1.5 billion is too much to ask.
Remember, the CEO of News Corp is Rupert Murdoch. Everything you see with the Fox logo is his. Its yearly revenue is around $24 billion. "News Corp" is a nice generic name that no one remembers while it's holdings grow out of control. Whenever you see Fox or Myspace or anything listed in the link above, you should be thinking one thing: "It's all News Corp under the direction of one man."
Pretty scary when you think about it.
My work here is dung.
Let's see... Internet company... flaky business model... outrageous amounts of money... well, my time machine works -- I must be back in 1998!
GetOuttaMySpace - The Anti-Social Network
... so now we've got
;)
1. Create service
2. Get other people to violate copyright with your service
3. Avoid Lawsuits
4. ???
5. Profit (or at least $1.5B)
I'd really love to have seen their pitch to any VC firms
"If A equals success, then the formua is A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut" - A Einstein.
for about $2B, then it's not so much. And Broadcast.com (Mark Cuban's "invention") didn't really work yet. And I'll bet he's grousing that his current HD venture can't get that figure because it's not as evolved, and certainly not as popular as YouTube.
The price is huge, but it's not out of line with web-based social properties. Not that it's fair.... but the future revenues if it's managed well could be very big.
---- Teach Peace. It's Cheaper Than War.
and the buyer should keep another $1.5bn to settle the lawsuits.
They're clearly idiots. They have a market position but little in the way of real IP as far as I can tell. 0.5bn for myspace was only on account of a particularly high grade shipment of psychedelics turning up at news international... If anyone's that dumb again, well, it's business darwinism.
They want their business model back.
-- Fugacity: Confusing chemists since 1908
Really, enjoy it while you can, because the record companies will sue YouTube into the ground. Soon.
So this company will not be worth anything in a year.
True, but isn't the price difference Content vs Distribution?
I'd assume that content would always surpass the value of distribution, but maybe that's what's changing.
"If A equals success, then the formua is A=X+Y+Z. X is work. Y is play. Z is keep your mouth shut" - A Einstein.
....pay for the bandwidth. How do they manage to pay for it now? I'd love to see some figures on their revenue vs costs.
but isn't the price difference Content vs Distribution?
YouTube's audience dwarfs Disney and Pixar's combined. Someone estimated what, 60,000 new videos uploaded every day? Just a month's worth of an audience of that magnitude is immensely valuable given the obsolescence of the mass market.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Can I borrow your chicken for a while...?
I think we can keep recursing like this until someone returns 1
Or, to put it another way, I think there are better alternatives to suing and the record companies have figured this out. When they sued Napster, Kazaa & eDonkey and then started suing users, I don't think their profits went up. I mean, they might have gotten a few million from the companies and a few thousand from the users that year. But they destroyed something that they could have taken advantage of. Most industries would kill for an infrastructure of people acting as their own marketing tools spreading their product around. Now, it was illegal because the product was being copied illegally. But if the record companies could have taken a look at the business model and adapted it to suit their needs and sued for the ability to call the shots instead of just pure cash, I think they would have come out further ahead in the long run.
You see, if the record companies looked at YouTube and tried to drive them in the ground, they'd only be trying to suppress something that has come about naturally. Why don't they just claim what is theirs and demand all the copyrighted material ad revenue goes straight to them? Why don't they try to work something out with YouTube in an attempt to generate a recurring income? I mean, surely YouTube can keep the quality down on the work or restrict it to certain songs so that people will feel compelled to purchase CDs/DVDs, can't they?
I think YouTube is like a wild stallion and the record industry is afraid of it. They can either shoot it dead (but that will just spawn more) or tame it and generate a steady income from it.
My work here is dung.
give me some of what they are smoking, zero revenues, zero profitability, zero commercial trade secrets/competitive edge.
for $500m I could replicate You Tube in 3 months.
dotbomb 2.0 - how short are peoples memories?
Dean Collins
www.Cognation.net
The trio of MySpace, Wikipedia and Youtube have been hyped up for a while (look at the alexa ratings, they are very similar but still small compared to the real titans Google and Yahoo). But consider they are mostly a 2005/6 fad. 2007 is when the bubble will pop.
.1 refering to patch to stop the hype and everything will be back to normal.
Wikipedia will pop in 2007 when more people discover the Wikitruth and enough college students fail their degree due to citing wikipedia in their papers. Wikipedia was a geek site anyway until Seigenthaler happened.
Youtube will get replaced by hundreds of other video sharing websites. There is only so many 79 year old men with a web cam. Once everybody has seen all the videos people will return to bit torrent for the copyrighted stuff and the video sharing sites will be mostly videos of their cats.
Myspace will crack as soon as all the emos get a life.
You heard it here first
In 2007. Web 2.1 will be launched, with the
>>> Can I borrow your chicken for a while...?
I can sell you a chicken for $1.5b...
Here's the problem though. Pixar actually brings in money. Youtube is just an audience without any product. Advertising only brings in so much.
is to not have any money.
As soon as there is something to sue for they are gone.
They are just protecting thier business.
Roger Taylor (The drummer from Queen) wrote an excellent song about Rupert Murdoch, to be found on his 'Happiness' album.
Check out the Lyrics
source? I dont belive this figure of operational costs of $1bn per month for the company as a whole let alone just the bandwidth portion.
I'd be interested in some actual facts if you have them.
Dean
The real cost is three orders of magnitude lower.
http://michaelsmith.id.au
sorry, mistype, it's $1m.
I want a list of atrocities done in your name - Recoil
As it stands right now, Youtube seems to be making a hellacious profit. Cnet estimated them at around $1 billion in value if bought, and the potential is there for much more. Any litigation can be easily handled, and bought off when you're worth that much. I forsee an out-of-court settlement between Youtube and a copyright holder, but ultimately won't hurt thier viability as a marketable asset. Warner and EMI are already on board to have music video's hosted, and that only makes Youtube more sellable.
I bring nothing to the table.
It's 1 MILLION a month in bandwidth costs.
The GP is right, I could build a youtube clone in about a month, but what's the point if nobody looks at it.
Is it worth $1.5 billion for those people? Well the dollar is falling, that's inflation for you. You never know, perhaps potential buyers will make a lower counter offer.
Deleted
<Dr Evil> We will keep showing asians lip-synching Backstreet Boys unless you pay us... a kajillion trillion dollars!</Dr Evil>
While I understand that the price is set by the ability and willingness to buy on one and the willingness to sell on the other side, I just honestly ask where youtube's value is? What about it is "worth" 1.5b? Content? Hardly. Most of it is "rubbish". Rubbish that people watch, granted, but still mainly rubbish. Nothing you could syndicate, if only for copyright issues. Its userbase? How? They don't buy anything, they don't sell anything, they just hog the limelight in an attempt to gain 15 minutes of fame. Here today, gone tomorrow. Advertising capability? How? I never ever saw the youtube frontpage, and the video successfully distracts you from any flashy banners that could be on the page. Not to mention the convenient "leech the video" tools.
I'm honstly asking where youtube, as a name, content or concept, warrants 1.5b USD.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
Which can be really dangerous. It might just backfire.
I had that experience myself, asking once for about 5 times the regular price on a service I really didn't want to execute. Guess what ? They said yes.
Moral of the history: if you are going to overprice so you get a "no", make sure your price is so high there is absolutely no chance they will say yes.
I should have asked 20x, not 5x. YouTube should be asking for $100bi is that is what they want (not to sell).
morcego
I'd take any offer over $50m. Youtube is Napster's legal problems with far less ground to stand on since they host the videos on their servers.
Just don't tell us you're one of those 'natural logarithm' freaks. We'd have to put you to the torch.
You want the truthiness? You can't handle the truthiness!
of richest Americans to find out how much money they needed to get listed.
There are a lot of eyes looking at YouTube... supposedly 100 million videos watched a day. Even so I have my doubts as I feel the people that watch YouTube just want to watch videos and have no loyalty specific to YouTube. Admittedly they made web videos easy (no plug ins for QuickTime, Real, or MSN) and got people to embed videos on other sites. However I get the feeling that if YouTube craters due to copyright suits, or the company that buys them sticks ads all over everything, people will just start watching videos on some other site. So YouTube may be a good buy at first but then the parent company will inheret all their copyright problems and bandwidth expenses... so I feel the price is really high. I will predict it will be sold but for a much lower price. That said, if someone does buy YouTube for anywhere near $1.5 billion this will light a fire under Web 2.0 like Netscape's IPO in the ninetees. Welcome back the sock puppet and the chimps.
--------
Webomatica
Not in America, dude. In UK English collective nouns are indeed treated as plurals. But in American English they generally aren't.
UK: "Microsoft have come out with a new way to screw consumers.US: "Microsoft has come out with a new way to screw consumers.
./: "Micro$oft suxxors!"
Insert witty sig here.
Dude. I seriously do not think that with the current exchange rate between the dollar and chicken shit means you seriously want to own $1.5bn worth of chicken shit. And even if you did, who would buy it, even if it was worth that much?
Which doesn't sound quite right when you use emphasis:
'Microsoft itself has come up with'... vs. 'Microsoft themselves have come up with'... the US version sounds better in my opinion.
Registered Linux user #421033
Lisa: Wow, Dad, you're surfing like a pro!
Homer: Oh, yeah! I'm betting on Jai-alai in the Cayman Islands, I invested in
something called "News Corp"--
Lisa: Dad, that's Fox!
Homer: [shrieks] Undo! Undo! [hits key, sighs]
At just $0.99m
With all the copyrighted material on YouTune, all you need is a few well calculated lawsuits.
I can see YouTube making a nice chunk of money, but 1.5 billion for a service that could easily be replicated doesn't seem realistic.
Pixar actually brings in money.
Pixar brings in seven billion? Disney's animation division brought in money too. They were shitcanned so fast it left a dent. But see that's the workplace now:
"Hey boss I just delivered 500 times my salary to the top line!"
"Great. We want your salary too. Get out."
And yep, that's exactly what Disney did to hundreds of people for no reason.
Advertising only brings in so much.
Been runnin' TV for 50 years.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Mark parent "informative" .I just imagined 1.5 bill worth of chicken shit... and how it smells. - I do not want repeat the experience
And even if you did, who would buy it, even if it was worth that much?
Disney. They'd make it a character in a movie. After it faceplanted, they'd make a sequel, as a metaphorical gesture of wiping their ass on the face of someone with a really good idea.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Even if YouTube lost a bunch of popularity, it would theoretically be left with at least *some* content it owned rights to. I thought part of their terms of service included the fact that they reserve the rights to whatever content you upload to them? Obviously, uploads of previously copyrighted works don't apply -- but there are probably loads of humorous "reality TV-esque" clips made by college students and the like that YouTube could sort though, package up, and resell.
Would that make them worth 1.5 billion? Nah... but it has some value you can't completely discount.
The grass is only greener, if you don't take care of your own lawn.
Pricey, but not considered unreasonable for a strategic purchase of a well known brand.
That can't even pay for itself until 2056? Wow. Well known brands must be pretty valuable. Must be why Disney can't green light anything except sequels and layoffs.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.
Which in turn represent US$43 000 000 000 000 000 in estimated lost sales.
or US$540 000 000 000 000 000.3 in lost profits
hey ! this is fun! US$230 002 000 100!
US$432 294 100! weeeeeeeeee!
Earlier this year a report about Google in the Economist claimed that some analysts felt that the high share price of Google was justified simply because they expected Google to end up with a minimum of 1% of the market for all internet distribution of video content. That was before YouTube caught on. Given that YouTube is now in a good position to grab onto a very large chunk of online video sales, and because many of YouTube's customers are young people who can easily be developed into a long-term loyal customer base, I think that 1.5 billion is a steal.
I support this attitude and would like to inform the potential employers I won't sell for less than $1.5 million.
"Blah blah blah." - [citation needed]
It's about to go down in price. Google Video is about to release a new, less ugly version and then there's http://soapbox.msn.com/ and Live Video Search.
Slahdot is the fur coat.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
The Internet Archive, which is a nonprofit, is also in the free video archiving business. Their main concern has been storage, of which they now have petabytes. Making the system friendly to the casual user has been a lower priority, and the Archive has a tiny staff. But you can get an Archive account and upload your video right now. If you have anything of historical significance, please do so.
The Archive has had some problems with bandwidth, but they just moved to a new data center, and that's improving. Last year, they obtained an archive of Greatful Dead recordings, which can be played out as streaming audio. The Deadheads, with their short-term memory loss problems, would play the same stuff over and over again. This was sucking up most of the outgoing bandwidth and interfering with video playback.
The Archive will probably be around long after YouTube is gone. Among other things, there's a duplicate of the Internet Archive in Egypt.
And at least one giant, Universal Music, are threatening to sue the company if their artists' songs keep appearing there.
Collective nouns are treated as plurals, even if their construction suggests singular or uncountable.
The collective noun isn't the subject of the verb, the word "giant" is. The main clause, which should be grammatically correct without the appositive, is "And at least one giant is threatening...".
Charge the actual amount that you'd be willing to do it for. If you weren't willing to do it for 5x then you should have asked for more.
Patrick Doyle
I mod down every jackass who puts his moderation policy in his sig. Oh, wait a sec....
who would buy it, even if it was worth that much?
Since the definition of monetary worth is basically the max amount that someone is willing to pay, I'd say that the one willing to pay that much would buy it. If no one would pay $1.5b, then it wouldn't be worth $1.5b. So if it was worth that much, it must mean someone is willing to buy it at that price.
--
Promoting critical thinking since 1994.
I'm pretty sure in 5 years it will be known by most as "Whotube? oh yeah that..." Longetivity sure is short lived in our modern web 2.0-sphere.
whoever pays 1.5b for that site, is going to need it!
the only permanence in existence, is the impermanence of existence.
Costs owed for excessive bandwidth = $400,000,000
Current value of impending lawsuits =$900,000,000
Payoffs to various politicians, judges and law enforcement = $150,000,000
Net value = $50,000,000*
* = value does not take into account private jets, ferarris, on-the-job chefs, Bawls dispensers or boardroom lapdances.
I seriously do not think that with the current exchange rate between the dollar and chicken shit means you seriously want to own $1.5bn worth of chicken shit. And even if you did, who would buy it, even if it was worth that much?
GoldenPalace.com?
Do you realize the nitrogen content of chicken shit? Clearly the terrorists would want $1.5B worth of chicken shit, and they'd blow the feathers off of an entire city.
Oh You POS
So, which article did you try to post a pseudo-scientific bunch of mombo jumbo to?
Little Brother, watching the watchers
I only just noted the RSS feed truncated the title. I was all excited, expecting to read about how YouTube wouldn't sell for less than $1.
No, zero percent of the content violates copyright laws.
Copyright protects expression, not content.
Perhaps 90 percent of the expression, the video, is someone's copyrighted work.
1. It's a really, really shitty site populated mostly by teenage morons
2. It's probably a liability because OMG STALKERS SOMEBODY THINK OF THE CHILDREN
I like getting modded down when I'm right. It means I really am getting on someone's nerves. Thanks for confirming that I had a point, there.
My book, podcast
Jeez, I rest my case.
I want a list of atrocities done in your name - Recoil
While technically profitable, Walt Disney Feature Animation was hemorrhaging cash.
Bullshit. Lilo and Stitch alone could have supported their entire animation division for 50 years.
Three of the four feature animations released after Tarzan lost money.
While how many of the previous four made nine figures? Or ten?
By 2002, the division had clearly lost sight of how to make a successful film.
No. MANAGEMENT had clearly lost sight of how to make a successful film, since MANAGEMENT was directly involved in EVERY project down to the most BASIC creative levels. The animators drew what they were told to draw. These were the same animators that drew Lion King, Beauty and the Beast, Little Mermaid and Lilo and Stitch. Were those successful films? They must have been, since they practically reinvented the entire company.
WDFA's last traditionally animated film, Home on the Range, was the lowest grossing Disney animated feature ever.
Green-lighted by whom? Took ten years to get Lilo and Stitch made.
So don't bullshit about "no reason".
You're asking me not to bullshit? Really? Disney feature animation was shitcanned for no reason at all. 2D animation has no problems making money when management doesn't fuck everything up. There are 400 animation studios in Japan. Give it up.
Business isn't willing to pay for products, innovation and careers, so we get brands, mortgage commercials and layoffs.